Breadcrumbs

Tobacco Settlement Receipts - April 2014 (5/5/2014)

The Honorable Stephen M. Brewer, Chairman, Senate Ways and Means CommitteeThe Honorable Brian S. Dempsey, Chairman, House Ways and Means CommitteeThe Honorable James T. Welch, Senate Co-Chair of the Joint Committee on Health Care FinancingThe Honorable Jennifer Benson, House Co-Chair of the Joint Committee on Health Care FinancingThe Honorable John F. Keenan, Senate Co-Chair of the Joint Committee on Public HealthThe Honorable Jeffrey Sánchez, House Co-Chair of the Joint Committee on Public HealthEmme Schultz, Assistant Secretary for Budget and Finance, Administration and Finance

Re: Tobacco Funds

In accordance with the requirement in Section 3 c. of Chapter 29D of the Massachusetts General Laws, I hereby certify the receipt of a deposit of Massachusetts’ share pursuant to the master settlement agreement (MSA) resulting from the action known as Commonwealth of Massachusetts v. Phillip Morris, Inc. This amount is Massachusetts’ share of the funds withheld in connection with the 2005 non-participating manufacturers.

On April 16, 2014, an annual payment of $271,707,077.08 was received and confirmed by Treasury. On April 17, 2014, a payment was received for $10,135,195.76 and on April 28th, an additional $209,739.85 was received.[1]

I have also enclosed a spreadsheet showing the base payments projected in the MSA, actual payments received, as well as projected and actual payments to the law firms that represented the Commonwealth in the case.

[1] In accordance with sections 203 and 204 of Chapter 38 of the Acts of 2013, an amount equal to 20% of such receipts, or $56,409,802.54, is to be transferred to the State Retiree Benefits Trust Fund (SRBTF) from unspent FY 2014 debt service appropriations. To the extent such unspent debt service appropriations fall short of 20% of tobacco settlement revenues, Chapter 38 requires that the shortfall be transferred to the SRBTF from the tobacco settlement payments. The balance of the FY 2014 tobacco settlement payments are to be deposited in the General Fund. The transfers from the tobacco settlement payments to the SRBTF are to increase by 10% each year, until in FY 2022 100% of tobacco settlement payments are to be deposited in the SRBTF.

[2] This amount mount differs from the Attorney General’s April 30th Certification that the Commonwealth was allotted $282,124,397.24 through the manufacturer payments because there was an outstanding debt to the National Association of Attorneys General (NAAG) related to litigation costs, which was repaid through the disbursement of the 2013 funds, resulting in the slightly reduced cash to the Commonwealth of $282,052,012.69